ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN: 9780190931919
Author: NEWNAN
Publisher: Oxford University Press
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- Assume a company expects to sell 6 million packages of Pop-Tarts Gone Nutty! in the first year after introduction but expects that 70 percent of those sales will come from buyers who would normally purchase existing Pop-Tart flavors (that is, cannibalized sales). The price for a package of Pop-Tarts Gone Nutty! is $1.30 and its variable cost is $0.65, when the price for a package of original Pop-Tart is $1.10 with variable cost of $0.30. Assuming the sales of regular Pop-Tarts are normally 300 million packages per year and that the company will incur an increase in fixed costs of $450,000 during the first year to launch Gone Nutty! will the new product be profitable for the company? Determine the unit contributions and the loss for every package cannibalized from the original product. (Round to the nearest cent.) Unit contribution original Pop-Tarts $ Pop-Tarts Gone Nutty! Loss for every package cannibalized Sarrow_forwardIf the FC = $200, the VC of the 9th unit is $400, and the VC of the 8th unit is $300, then ___: a) The MC curve is above the ATC curve at the 10th unit;b) The MC of the 8th unit is $80;c) The ATC of the 8th unit is $80;d) The AVC of the 8th unit is $75.arrow_forwardABC company creates specialty shipping bags that they sell to pharmaceutical companies across the globe. With their current equipment, ABC can produce 12,000 shipping bags for every 10 bundles of materials purchased. Every month (20 working days), ABC purchases 100 bundles of materials. Each bundle requires one (1) labor minute to process, and every labor hour costs an average of $14.00. Each week (5 working days), ABC pays $5,000 inoverhead costs, and equipment costs $600 a day to operate. (a). How many shipping bags does ABC produce in a standard month (20 working days)? Each workday (8 hours)? (b). What is the single-factor productivity for labor, per workday (8 hours)? Whatis the multi-factor productivity, for every dollar spent per shipping bag?arrow_forward
- The time to assemble the first unit on a production line is 11 hours. The learning rate is 0.86. Approximately how long will it take for the fifth unit to be assembled? The number of hours needed for the fifth unit to be assembled is hours. (Round to one decimal place.)arrow_forwardGiven: TC = 3,000 + 100Q TC = 3000 + 100Q ATC = Q = 10 AC = TC / Q TC = 3000 + 100*10 = 4000 ATC = 4000/10 = 400 MC = ∆TC / ∆Q = 100 How do you figure the Fixed Cost with Fomula?arrow_forwardYou manufacture ceramic lawn ornaments. After several months your accountant tells you that your profit P(n) can be modeled by the function P(n)= -0.002n^2+5.2n-1208 where n is number of ornaments sold each month. A) How many ornaments must you make and sell to break even. B) How many ornaments must you make and sell to maximize profit. C) What is the maximum profit. D) How many ornaments must you make and sell in order to earn a profit of $1657.arrow_forward
- (You will need to use a spreadsheet to tackle these questions.) 1. How much of q can be produced for £60,000 if the total cost function is TC = 86 + 152q − 12q2 + 0.6q3? 2. What output can be produced for £150,000 if TC = 130 + 62q − 3.5q2 + 0.15q3? 3. Solve for x when 0 = −1,340 + 14x + 2x2 − 1.5x3 + 0.2x4 + 0.005x5 − 0.0002x6arrow_forwardtype plzarrow_forwardShow the solution step by steparrow_forward
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